Last year saw a surge in listings by small- to medium-sized enterprises (SMES), with larger companies set to jump on the IPO bandwagon this year, said Chauhan.

"All round activity is huge and many more IPOs have been filed with regulators, " Chauhan said in an interview with CNBC.

"Now that there's a lot of optimism and hope, and markets have gone up substantially, a lot of companies are going to come and participate in the market. That would include mining companies, telecom companies, consumer durables, cement, manufacturing, and so on," he said.

VIDEO2:5302:53

India: Open for business?

The Indian stock market saw 47 IPOS in 2014, raising $282 million, according to Dealogic. This compares with 38 deals totaling $295 million in the previous year.

Accountancy Ernst and Young also predicts a "revival" of the IPO market this year.

"Economic growth is at a two-year high, businesses are in need of capital and pent-up demand combined with favorable secondary markets and a backlog of financial sponsors waiting to exit signals a revival of IPO activity in 2015, despite some lingering retail investor uncertainty," the firm wrote in a note in December.

When asked whether he expects high-profile foreign businesses to list in India, Chauhan said it was unlikely. International companies tend to opt for other markets such as the U.S., which can be more "hype driven," he said.

"You can get really runaway valuations in the U.S. for new concept companies. In India, they are more sane and tend to go towards more profit-oriented companies [with] established business models," he said.

Is investor optimism justified?

Chauhan believes that optimism around India is justified, however, he cautions that it may not be all smooth sailing for equity investors.

Investors should be prepared for market volatility particularly around when companies report their earnings, Chauhan said.

"There would be a bit of ups and downs especially [at the end of quarters] because results may not reflect that optimism [yet]," he said.

Nevertheless, he says on a 5-year horizon, India is "a good play."

After scaling fresh highs earlier this month, the rally in the benchmark Sensex stalled in recent weeks amid a lack of fresh catalysts and concerns over corporate earnings.

The index has fallen over 6 percent so far this month, erasing the year's gains.